Alkami Gold Standard Series

Gold Standard Event Recap | Faces of Fraud 2021 Report

Our partners at Appgate, an industry leader for security access solutions, recently released their exclusive Faces of Fraud report. In conjunction with Information Security Media Group (ISMG), Appgate surveyed 120 financial institution (FI) security professionals regarding the challenges posed by fraud, as well as gaps and future strategies for their organization. The Faces of Fraud report is intended to provide more than just survey results—it also offers expert advice to defend against the online fraud landscape. 

We hosted security experts, Appgate’s Director of Product Management, Bryan Jardine; Director of Sales Engineering, Josh Schleicher; Regional Sales Director, James Noonan; and Information Security Media Group’s (ISMG) SVP, Editorial, Tom Field for a discussion around results from the report, where they provided insights into the current threat landscape and the future of fraud. Here are the highlights from the conversation.

How far fraud protection has come

The biggest security concerns FIs used to have were skimmers in their ATMs. Things have certainly changed since then, and in just the last three years security experts’ attention has turned to their anti-fraud controls. The lack of visibility over them made fraud detection more challenging than ever as workers were forced to protect their systems from a distance as the pandemic began.

2019 was the year of customer identity and access management, and the mantra was frictionless customer experience. By 2020, third-party risk became a top-three concern before any worries over supply chain security breaches, anticipating a problem that continues to plague businesses. By 2021, organizations agreed that business executives finally nearly unanimously understood the importance of cybersecurity and the impacts of fraud. 

For the last year, visibility has been an issue. FIs need to know what’s connected to their systems and who has access to it. In addition to filling the gaps between what tools are available and who has access to them, organizations now need a real-time understanding of the behavior of those who have access to their systems to mitigate potential fraud from the inside.

Changes in how users perceive security measures have changed as well. They once tended to believe digital security measures were a hindrance in the user experience. According to the experts at Appgate and ISMG, the industry is now seeing users beginning to understand how authentication factors into the user journey and their own financial security. Users are now choosing their financial institutions based on the level of their security.

With customer experience (CX) being a priority for FIs, fraud prevention and CX are being seen less and less mutually exclusive, and striking the balance between the two begins at the start of the user/FI relationship. Proper fraud controls early on reflect an understanding of the customer. This is where FIs establish they can be trusted with their security measures and demonstrate they have an intuitive digital banking experience in a secure environment. 

Internally, FIs are making fraud prevention a more integral part of their strategy. Security or IT teams used to be the only groups on calls with security partners. Now CX or customer authentication journey teams are collaborating because the gaps that exist between security and CX in a digital banking experience are where fraudsters strike.

Highlights from the report

In the survey, 68% of respondents said digital/mobile were the primary interactions they had with customers, reinforcing what has become apparent to many by now—digital platforms will continue to grow. Other report highlights featured in the webinar include:

  • 60% of respondents grade themselves “above average” or “superior” in identifying and mitigating fraud.
  • 38% of respondents say today’s fraud schemes evolve too quickly to keep pace with. 
  • 55% say their customers and/or partners lack sufficient awareness to protect themselves from socially engineered fraud schemes. 
  • 50% say fraudsters have too much valid customer info and can too easily work around controls meant to prevent accounnt takeover and origination. 
  • 51% of respondents said there is a greater acceptance for the need for anti-fraud controls in customer-facing solutions as a result of the pandemic.

Respondents said these were the most concerning schemes of the year:

  • Account takeover (45%)
  • Phishing (42%)
  • Business email compromise (36%)

Get your copy of the Faces of Fraud 2021 report for more insights — download the report here.

Thank you to Bryan Jardine, Josh Schleicher, James Noonan, Tom Field, and all attendees for another great Gold Standard Series event!

You can watch the Faces of Fraud 2021 Report webinar on demand by clicking the link below.

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